The average 30-year fixed rate mortgage was 6.32% yesterday, an increase of 0.16% since the day before. The 15-year fixed mortgage rate stood at 5.42%, up by 0.12%. The 30-year FHA mortgage averaged 5.59% yesterday, having risen by 0.15. Meanwhile, the 30-year jumbo mortgage rate was 6.78%, reflecting an increase of 0.11%.
The bigger picture
Mortgage rates are higher
Freddie Mac provides a great way to track mortgage rates over time. But, in isolation, its rates updates each Thursday can be misleading.
That was the case yesterday. "Mortgage Rates Continue to Trend Down," read Freddie's headline. "Mortgage rates decreased for the fourth consecutive week. The last few months have brought lower rates and homebuyers are increasingly entering the market," said its commentary.
It's not that Freddie was wrong. But it deals in weekly averages and collects most of its data between each Thursday and Wednesday. So, the impact of Wednesday afternoon's big jump in mortgage rates (and yesterday's smaller but moderate rise) would have barely (or not at all) affected the trend it was reporting.
So, yesterday afternoon, just as Freddie released its report, that day's average rate for 30-year fixed-rate mortgages stood at 6.31%, according to ICanBuy, our preferred source. And that was the highest that rate has been since Oct. 13.
What's driving mortgage rates higher?
As we explained early yesterday morning, mortgage rates rose on Wednesday as a direct result of a news conference that afternoon hosted by Federal Reserve Chair Jerome Powell.
Mortgage rates typically shadow the yield on 10-year Treasury notes, so an article yesterday afternoon from MarketWatch about those yields is relevant to those rates. That article said:
"'The rise in Treasury yields is really the response to the generally hawkish message that I think Powell very intentionally portrayed,' at his news conference Wednesday afternoon that another rate cut as soon as December was 'far' from a 'foregone conclusion,' said Matt Bush, U.S. economist at Guggenheim Investments, in a phone interview.
"That’s 'particularly notable,' as it was part of Powell’s opening remarks as opposed to an 'off-the-cuff' comment made during the news conference, said Bush, sending 'a clear message' to the market, which had been pricing in a December cut as a 'virtual lock.'"
U.S.-China summit
Much of yesterday's rise in mortgage rates was likely the tail end of markets' reaction to Powell's comment. However, it's possible that encouraging news from yesterday's summit between Presidents Donald Trump and Xi Jinping didn't help matters.
Having said that, if investors believed The Wall Street Journal's reaction, the summit may have made little difference either way:
"After a face-to-face with Chinese leader Xi Jinping, President Trump said the meeting wasn’t just nice, it was a 12 on a scale of one to 10," said The Journal. "But for businesses caught between the two superpowers, the ugly reality remains: The U.S. and China haven’t addressed their underlying conflicts. Commerce is going to be rocky for years to come."
Still, the summit did bring some immediate relief for American soybean farmers and importers of rare earth materials. It also reduced the U.S. tariff rate on most Chinese goods to 37% from 47%, though that's still historically very high.
That was likely good for the U.S. economy, at least in the short term. And mortgage rates tend to rise when the economy is improving.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.32% | 6.34% | +0.16% | -0.06% |
| 15-Year Fixed | 5.42% | 5.46% | +0.12% | +0.02% |
| 30-Year Fixed FHA | 5.59% | 6.8% | +0.15% | -0.07% |
| 30-Year Fixed VA | 5.75% | 5.89% | +0.13% | +0.01% |
| 30-Year Fixed USDA | 5.73% | 5.87% | +0.2% | +-0% |
| 30-Year Fixed Jumbo | 6.78% | 6.8% | +0.11% | +0.09% |
| 5/6 Year ARM | 6.35% | 6.38% | +0.13% | +0.01% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.38% | 6.41% | +0.15% | -0.05% |
| 15-Year Fixed | 5.39% | 5.43% | +0.12% | -0.01% |
| 30-Year Fixed FHA | 5.56% | 6.77% | +0.15% | -0.05% |
| 30-Year Fixed VA | 5.8% | 5.94% | +0.15% | +0.03% |
| 5/6 Year ARM | 6.42% | 6.45% | +0.23% | +0.04% |
What's coming up?
Although economic reports are usually the main drivers of changes to mortgage rates, they're not the only ones. The general mood in markets and economically consequential news can also affect those rates. News items concerning employment, inflation, tariffs and deficit funding are especially influential at the moment.
The shutdown means almost no official economic data will be published until the government reopens. So far, there has been only one exception: The delayed September consumer price index was published on Oct. 24. Nothing else is expected to be released before the shutdown ends.
Mortgage rates today
There is only one economic report on today's MarketWatch economic calendar.
That is the October Chicago Business Barometer, which is a type of purchasing managers' index from the Institute for Supply Management.
Markets are expecting the Barometer to show an improvement, rising to 42.0 from September's 40.6.
While this report is unlikely to move mortgage rates unless it contains truly shocking data, we'd like to see a number below 42.0. Those rates tend to rise on better-than-expected figures.
